Tales from the Bankruptcy Self-Help Desk

Ironically, there were more lawyers at the bankruptcy self-help desk today than debtors.  It seems that many of my fellow bankruptcy lawyers are coming around to something I have known for quite a while: the bankruptcy self help desk is a great place learn about every scenario imaginable in personal bankruptcy while providing valuable assistance.

One big 341(a) no-no, I saw today…

One debtor when asked by the U.S. Trustee whether she had conveyed any property in the last four years, responded that she sold a free and clear house to her sister for $1 four or so years back.  The U.S. Trustee is now be bringing a motion under California’s Fraudulent Conveyance Statute.

What is really required now is proper legal representation.   As much as I want to help everybody as much as I possibly can, there is only so much I can do at the self-help desk for free.  The bottom-line is that a $150,000 asset is in play and there are numerous defenses which must be skillfully asserted.

My brief review of her case noted that he transfer may have occurred more than 4 years ago, it may be improper to bring a motion under California’s Fraudulent Conveyence Statue when the property is in New Jersey, and that she inherited the property from her father whom she took care of before he died, but had an obligation to share the property with her five siblings.  I hope the family now circles the wagons to protect a valuable asset, but good legal representation from the beginning could have nipped this in the bud.

The other interesting case I came across was a Pro Se debtor sued for fraud under Section 523 (2) (4) (6) of the Bankrupty Code.  It is fortunate that these code sections require suit for non-dischargeability.  The debtor hired a guy to do tenant improvements and paid the entire amount agreed and then some.  Unfortunately, the guy who is now suing her did not pay his subs and probably is himself in breach of contract.   The motion fails to allege any facts to create a case for any misrepresentation of financial condition, breach of fiduciary duty, or injury to property.

My advice… Motion to dismiss under Rule 12 (b) (6), fails to state a claim.

Well, those were the highlights from the Bankruptcy Self-Help desk.  Till next time!